Rivian’s efforts to reduce costs have brought the company closer to profitability, although it anticipates that 2025 may still present significant challenges, primarily due to uncertainties arising from the new Trump administration.
The company released its fourth-quarter and full-year 2024 financial results on Thursday, revealing plans to deliver between 46,000 and 51,000 electric vehicles in 2025. Rivian, however, warned that changes in government policies and regulations, coupled with a challenging demand environment, could impact these projections. This caution was conveyed in the shareholder letter accompanying the financial results.
While specific policy changes were not detailed, it is noted that Trump expressed an interest in eliminating the $7,500 federal EV tax credit during his campaign. Vivek Ramaswamy, an ally of the Trump administration, has also suggested rescinding a $6.6 billion Department of Energy loan granted to Rivian for a plant in Georgia. This loan was finalized just three days before Trump assumed office.
Claire McDonough, Rivian’s Chief Financial Officer, stated in a conference call that the company looks forward to collaborating with the new administration and the Department of Energy regarding the loan. McDonough emphasized Rivian’s commitment to creating 7,500 manufacturing jobs at the Georgia site, though the company anticipates financial impacts potentially amounting to “hundreds of millions” due to tariffs, the possible loss of EV credits, and other policy changes.
CEO RJ Scaringe reiterated on the call the importance of the United States maintaining its leadership in areas such as electronics, software, autonomy, and AI, with Rivian aligning with the administration on this priority.
Throughout 2024, Rivian undertook significant cost-cutting measures, including a 10% workforce reduction in February and the introduction of simpler, less costly versions of its R1T pickup and R1S SUV in June. By altering 600 components and updating its electric architecture and software interface, the company successfully lowered manufacturing expenses.
These strategic changes contributed to Rivian achieving a positive gross profit of $170 million in the fourth quarter of 2024, with $60 million generated from software and services.
Rivian reported a total revenue of $1.7 billion for the fourth quarter, marking a 32% increase from the same period in 2023. Vehicle sales accounted for approximately $1.5 billion of this revenue, with an additional $299 million resulting from the sale of zero-emissions regulatory credits to other automakers. Across 2024, Rivian earned $325 million from these regulatory credits.
Software revenues have become increasingly significant, with Rivian generating $214 million from software and services in the fourth quarter alone, double the amount from the previous year. In 2024 as a whole, software and services contributed $484 million in revenue.
Although Rivian primarily engages in manufacturing and selling electric vehicles, its future prospects also heavily depend on software, particularly through a profitable joint venture with Volkswagen Group.
Rivian’s software revenue stems largely from charging and subscription fees, repair and maintenance services, as well as new vehicle electrical architecture and software development services provided through the joint venture.
